A mountain of coal waits for a ride

…Today, the economic pileup stretches from federally leased mines in remote northeastern Wyoming to population centers throughout the East, Midwest and South, revealing how dependent the USA has become on its newly emerging Western coal belt.

Spot-market prices for the basin’s coal are up nearly 70% year to date. That has contributed to the feverish run-up in energy prices, which threaten to sap the U.S. economy. During a summer heat wave that has sent electricity demand soaring to records over the past month, the interruption in coal supplies recently turned critical. If hot weather persists into September, brownouts are possible, energy analysts say.
Paul Lang, 44, president of Arch Western Resources, a subsidiary of Arch Coal, and, until recently, the chief of its Wyoming operations, says the rail disruption created a classic economic “panic” as hysteria-driven demand overwhelmed the already burdened supply chain.

Major electric utilities hoarded their dwindling caches of coal, which are nearing historic lows. The big mine operators squabbled with the rail companies over how to resolve the transportation bottleneck. And the rail companies, while starting major repairs, bickered over who might be taking advantage of the situation.

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